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Tort reform is the hot topic in Washington and among the legal community. On one side of the debate are the examples of blatant and willful malfeasance by corporations or doctors that have caused substantial harm to individuals. On the other side are the examples of lottery by litigation, where contingency trial lawyers drum up and encourage frivolous suits. Perhaps, because the debate has relied upon these examples of egregious results, it has not moved forward. Rather than focus on the harsh consequences of leaving tort law unchanged or of substantively reforming it, the tort reform debate should look toward civil procedure as a means to address tort and civil litigation reform. A relatively minor amendment to the Federal Rules of Civil Procedure, and the application of this rule to all state civil litigation, would eliminate the vast majority of egregious results that are at the center of the tort reform debate. Rule 68 is a little-known provision. It provides that if a defendant makes an offer of judgment and the plaintiff does not recover more than the amount offered, the plaintiff has to pay the defendant’s costs that were incurred in the litigation after the offer was made. This rule has not been substantively amended since 1946. The courts, unfortunately, have interpreted the term “costs” as excluding attorney and expert fees in most situations. Consequently, this provision has not seen much use. Relatively minor changes to Rule 68 could provide significant benefits to civil litigation. This rule should be amended so that “costs” includes all attorney fees, expert fees and all other expenses associated with the litigation. The rule should be further amended to provide that counsel is jointly and severally liable for the award of such costs in contingent fee matters. These small changes would level the litigation playing field and resolve the vast majority of problems associated with civil litigation. In essence, these changes would move civil litigation closer to the British system of loser pays, but only after a plaintiff had the opportunity to settle the case fairly and refused to do so. These changes would also encourage the prompt settlement of suits and, thus, greatly reduce the overcrowding and delay in dockets across the country. They would also eliminate the vast majority of frivolous suits, yet still protect an individual who was seriously and wrongfully harmed by another’s improper conduct. For example, presume that an unfortunate homeowner is injured by a lawnmower after sticking his hand underneath it while the mower was operating. The vast majority of people would think that such an individual was foolish and should not be entitled to any recovery. Nevertheless, he will be able to find a contingency fee lawyer and bring a suit against the lawnmower manufacturer for failure to label or some other tort-based theory. Because there is such a high level of negligence on the part of the plaintiff, the manufacturer could make an offer of a relatively small amount: for example, $5,000. If the plaintiff refused the offer, rolled the dice, went to trial and lost or recovered less than $5,000, the plaintiff and his attorney would have to pay all of the defendant’s litigation expenses that were incurred after the offer was made, including all attorney and expert fees. Take another example: A woman and her baby are injured by an obstetrician who has a history of malpractice problems and incompetence. The plaintiff brings suit, and the defendant makes an offer of perhaps $100,000. This is a substantial sum, but not one that reflects the level of harm and malfeasance by the defendant. The offer is refused, the case is tried and the plaintiff recovers $5 million. In that situation, no costs would be awarded against the plaintiff. Taking this example one step further, the defendant this time recognizes the seriousness of the case and makes a fair offer of $2 million. The plaintiff would have to evaluate the offer much more seriously because now she must balance the risk of getting more than $2 million against the likelihood of paying all of the defendant’s true costs. The plaintiff may have only valued the case in the $2.5 million range. Thus, the heightened risk to her in trying the case, balanced against the small benefit of obtaining an amount above the offer, would not be worth it. The case would settle at $2 million. Thus, these changes will require plaintiffs and defendants to look at their cases earlier and more realistically. They will hold plaintiffs who ignore a fair settlement offer and roll the dice in hopes of getting a runaway jury verdict accountable for the harm that they cause to defendants, the court system and society in general. INCREASED LAWYER ACCOUNTABILITY Moreover, making contingency fee lawyers jointly and severably liable with their clients in these situations will increase lawyer accountability. Such shared liability will also guarantee that an award of costs has teeth, and will not be entered solely against a judgment-proof plaintiff. From a standpoint of fairness, when the lawyer and the client are financially intertwined through a contingency fee agreement, there would be little reason or bases to dispute that they should not also be jointly and severably liable for a failure to fairly and properly negotiate a settlement. Thus, these small changes to Rule 68 could greatly reduce the number of cases that are tried, substantially level the playing field in civil litigation and address the principal arguments on either side of the tort reform debate. Glen Belvis is a partner at Chicago’s Brinks Hofer Gilson & Lione.

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